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What is the difference between chapter 7 and chapter 13 bankruptcy? And how do you know which you qualify for?

Detroit, MI |

I am very far in debt after being on workmans comp for almost 6 months. I am back to work part time, but work in pain and still receive some workmans comp payments. I feel I need to file bankruptcy, but am not sure of the differences in them and which I would qualify for.

Attorney Answers 3


  1. Some bankruptcies discharge and get rid of a debt, some just get you plans through which you can pay off the creditors. You need an attorney to make sure you get in the best plan for you.


  2. Chapter 7 is debt liquidation, in other words, if you have any property that can be liquidated to pay off creditors, those assets are liquidated and your creditors receive a share. Very rarely does anyone have assets that can be liquidated as you are allowed to keep most items, house, car, retirement savings, household goods etc.

    Chapter 13 is debt restructuring, basically you come up with a repayment plan to pay back your creditors over a 3-5 yrs period depending on income and debt.


  3. To qualify for Chapter 7 you must pass a means test. If you go to legalconsumer.com you will find a free means test calculator that will help you determine if you can qualify to file a Chapter 7. The best way to find out about all of the intricacies of bankruptcy is to consult with a local bankruptcy attorney. Many attorneys offer free initial consultations. Take advantage of this and learn what you need to know so that you can make an intelligent decision.

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